NEW CLAUSE.—(Amendment of s. 32 of Finance Act, 1896.) (Hansard, 21 June 1921)

§ Captain Sir B. STANIER
I beg to move "That the Clause be read a Second time."
We find that under the Finance Act, 1896, if you want to redeem the Land Tax you have to give thirty times the sum assessed, and we move that it should 1314 be 17 instead of 30. The reason of that is this. In the Tithe Act under which we are now working, the tithe has been redeemed at 17 years. If you can redeem tithe at 17 years, we contend that you should not be charged thirty times the sum assessed for the Land Tax.

§ Sir E. POLLOCK
I think there is a certain amount of confusion in saying that the present time system or number of years purchase applicable to tithe redemption ought to apply in the case of the Land Tax. No one knows better than the hon. and gallant Member that this question of tithe redemption was settled by the Act of 1896 and that whereas up to that time the redemption of the Land Tax stood at about37 years it was reduced by the Act of 1896 down to 30 years. I can understand what my hon. Friend and those in whose names this Amendment stands desire to do. They want to suggest now that inasmuch as tithe redemption has been reduced to 17 years, so by parity of reason you should apply a similar number of years to the redemption of the Land Tax. But I am quite certain that my hon. Friends will agree that you cannot by parity of reasoning say the Land Tax and tithe are equivalent. The Land Tax is called a tax, and no doubt originally it was imposed as a tax upon the land. But it stands in a very peculiar position. It is, perhaps, one of the oldest impositions upon the land but I think the right way in which to deal with it, particularly by the method of collection of it, is to regard it as a rent-charge upon the land in favour of the State. I do not think you can call it a tax in the same sense that one applies the word "tax" to impositions which are given for a period of years or renewed year by year. Land Tax now stands under the Act of 1797 and even then it was considered an old tax and one may regard it as rent-charge issuing out of the land in favour of the State. I think the Mover of this Amendment will agree that during the past few years, 30 years' purchase has been adopted in a good number of cases where sales of land have taken place, so if one regards the value of a rent-charge at the present time, 17 years would be by common consent much too short a period and it is much more likely that 30 years would be adopted.
I dare say my hon. and gallant Friend will differ from me, but if we were 1315 bidding against each other for the purchase of rent-charge he would probably be able to go beyond me, and he would get very near 30 years. It is a well secured investment, and in these circumstances I think 30 years is not very far wrong. But supposing it be wrong I am quite satisfied that 17 years is too short. Whether we agree upon 25 years, 26 years and 27 years, or even up to 30 years if we are dealing with a rent-charge, I am quite certain that I am not far wrong in saying that 25 years to 30 years would be a right valuation at the present time, the only real reason for altering the period of 30 years laid down in the Act of 1896 is that either you deal with it on the basis as if it was tithe, which I venture to suggest is not an analogous case, or you may say you can invest your money on better terms at about 3½ per cent. The value of money from time to time changes. When this valuation of 30 years was inserted in the Act of 1896 it was an agreed number of years put in which possibly displeased some and pleased others, but there it stands as the measure of the value of the rent-charge. I do not think any case at the present time could be made out for altering the value of that rent-charge, and certainly not of reducing it to the period of 17 years suggested in the Amendment, and for the reasons which I have endeavoured to express as shortly as I can, I am afraid I am unable to accept the Amendment.

§ Mr. PRETYMAN
I really must traverse with great diffidence the suggestion of the Solicitor-General. My hon. and learned Friend does really seem to me to forget what Land Tax is. The Land Tax is not a rent charge at all. It is a quota levied, not upon any particular land; it is a quota levied upon a parish as a whole, and that particular sum is one distributed annually amongst all the land in that parish liable to Land Tax. All land in that parish is presumed to be liable to Land Tax until it has been redeemed, and the reason Land Tax is redeemed is not because it is the ordinary question of redeeming a rent charge which is paid over in the ordinary way; it is because if that land is going to be put to some more valuable use, such as building, its quota would be largely increased. Therefore before the purpose to which the land is to be used is altered 1316 it is customary to redeem it. Otherwise the charge might be doubled, trebled, or quadrupled, and for that very purpose you have the right to redeem, because what really should govern the redemption is the value of money at the time, and the reason 30 years is fixed is not so much analogous with the tithe as that. 30 years' purchase does fairly represent the value of money. Now 17 years' purchase much more nearly represents the value of money. Money was then about 3 per cent., and now it is 6 per cent. I do not agree with my hon. and learned Friend that 17 years' purchase proposed is rather too few years to take. If the Chancellor of the Exchequer will say he will consider the matter before Report, and look at it from that point of view, and give us something less than 30 years, I for one would be satisfied.

§ Sir E. POLLOCK
May I say a word in reply. The hon. and gallant Member would not really suggest that I really do not understand what the land tax is, that it is not a charge upon the parish, and so on. I am glad to hear any explanation he has got to give me. I did not say it was a rent charge, but it ought to be treated as analogous to a rent charge in favour of the State and treated from that point of view as a sum paid yearly which is secured very fully in its favour. It is upon the ground of analogy that I speak of it as a rent charge. Supposing, for instance, there is a plot of land, say, at the annual value of about £5, and some buildings are put up of the annual value of £150, then the exact equivalent would be this. The landowner before proceeding to build would redeem the land tax at the cost of £7 10s. Taking the test, therefore, that the right hon. Gentleman has made I think the present system works out fairly exactly and I cannot accept the Clause.